S P Setia Reports Strong Sales Growth and Strategic Acquisitions

The property development business achieved revenue of RM 994 million and pre-tax profit of RM 138 million for Q3 2023, an increase from the same period last year. This is due to the delivery of UNO Melbourne (Stage 2) offsetting higher financing costs from rising interest rates, with significant contribution expected in the final quarter.

The construction business achieved revenue of RM 4.34 million and pre-tax loss of RM 2.427 million for Q3 2023.The pre-tax loss was attributed to unrecoverable costs incurred in certain internal construction projects. Other operating income mainly comes from investment properties such as hotels, shopping malls, and convention centers.

These businesses achieved revenue of RM 80.654 million and pre-tax profit of RM 0.249 million for Q3 2023, higher than the same period last year, mainly due to the hotel business only starting operation at the end of September 2022.

As of September 30, 2023, S P Setia has received a total booking value of RM 45 million, with 44 ongoing projects and outstanding sales amounting to RM 67.6 billion, demonstrating positive profit prospects in the short to medium term. However, the core net earnings of S P Setia Berhad for the first nine months were RM 153.5 million, down due to increased expenses, decreased contributions from joint ventures, higher financing costs caused by rising OPR, and higher tax rates. The income tax rate was high in the first 9 months of the fiscal year due to certain non-deductible expenses and unrecognized deferred tax assets.

In Q3 2023, S P Setia launched residential projects worth a total of RM 498.7 million, including double-storey terraced and semi-detached homes in the central region, two-storey villas in the southern region, and commercial retail and office units in the Setia Fontaines City Centre commercial center in Penang. The subscription rate for new residential projects in Bandar Kinrara was about 97%, while the subscription rates for townships such as Setia Bayuemas and Setia Fontaines also reached around 60%.

On September 3, 2023, S P Setia expanded its market share in Australia and entered New South Wales for the first time by acquiring freehold land in St Leonards, Sydney. On November 23, 2023, S P Setia Berhad announced the sale of 17.99 acres of land located in Setia City to KSL Bestari Sdn Bhd for a total sales amount of RM 228.8 million.

The group currently holds valid remaining land of 5,549 acres with a total value of RM 113.11 billion. Despite the challenging macroeconomic and market environment in Malaysia, the group remained cautious and balanced its capital structure while effectively managing its deleveraging plan to pursue sustainable overall performance. The net gearing ratio at the end of 3Q2023 stood at 0.53x, reduced from 0.57x as at Dec 31, 2022.